Table of Contents





|                                  
|----------------------------------
|UNITED STATES                     
|SECURITIES AND EXCHANGE COMMISSION
|Washington,
 D.C. 20549           
|                                  
|                                  
|                                  
|FORM 10-Q                         
|                                  
|                                  

|   |                                                                                                                                                         
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------
|þ  | QUARTERLY REPORT PURSUANT TO
 SECTION 13 OR 15(d) OF  THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2009.                
|   |                                                                                                                                                         
|OR
|   |                                                                                                                                                         
|o  | TRANSITION REPORT PURSUANT TO
 SECTION 13 OR 15(d) OF  THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM _____________ TO _____________

Commission file number: 0-22187



RENAISSANCE
LEARNING, INC.(Exact name of Registrant as specified in its charter)

|                                               |  |                                     
|---------------------------------------------- |  | ------------------------------------
|Wisconsin                                      |  | 39-1559474                          
|(State or other jurisdiction of incorporation) |  | (I.R.S. Employer Identification No.)

2911 Peach Street
P.O. Box 8036
Wisconsin Rapids, Wisconsin(Address of principal executive offices)

54495-8036
(Zip Code)

(715) 424-3636(Registrants telephone number, including area code)





Indicate
by check mark whether the Registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes þ No o



Indicate
by check mark whether the Registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
Registrant was required to submit and post such files). Yes o No o



Indicate
by check mark whether the Registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of large accelerated filer, accelerated filer and smaller
reporting company in Rule 12b-2 of the Exchange Act. (Check One): Large
accelerated filer o Accelerated filer þ
Non-accelerated filer o
(Do not check if a smaller reporting company) Smaller reporting company o



Indicate
by check mark whether the Registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).Yes o No þ



Indicate
the number of shares outstanding of each of the issuers classes of common
stock, as of the latest practicable date.



| |                               |       |            |  |                                
| | ----------------------------- | ----- | ---------- |  | -------------------------------
| |                               | Class |            |  | Outstanding
 at
 April 30, 2009
| | Common Stock, $0.01 par value |       | 29,231,524





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RENAISSANCE LEARNING, INC.

INDEX TO FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2009

|                               |  |                                                                                                       |  |      | 
|------------------------------ |  | ----------------------------------------------------------------------------------------------------- |  | ---- | 
|                               |  |                                                                                                       |  | Page | 
|PART I - FINANCIAL INFORMATION |  |                                                                                                       | 
|                               |  |                                                                                                       |  |      | 
|Item 1.                        |  | Financial Statements                                                                                  |  |      | 
|                               |  |                                                                                                       |  |      | 
|                               |  | Condensed Consolidated Balance Sheets at
 March 31, 2009 and
 December 31, 2008                       |  | 1    | 
|                               |  |                                                                                                       |  |      | 
|                               |  | Condensed Consolidated Statements of Income
 for the Three Months
 Ended March 31, 2009 and 2008      |  | 2    | 
|                               |  |                                                                                                       |  |      | 
|                               |  | Condensed Consolidated Statements of Cash
 Flows for the Three Months 
 Ended March 31, 2009 and 2008 |  | 3    | 
|                               |  |                                                                                                       |  |      | 
|                               |  | Notes to Condensed Consolidated Financial
 Statements                                                 |  | 4    | 
|                               |  |                                                                                                       |  |      | 
|Item 2.                        |  | Managements Discussion and Analysis of
 Financial 
 Condition and Results of Operations              |  | 7    | 
|                               |  |                                                                                                       |  |      | 
|Item 3.                        |  | Quantitative and Qualitative Disclosures
 About
 Market Risk                                          |  | 11   | 
|                               |  |                                                                                                       |  |      | 
|Item 4.                        |  | Controls and Procedures                                                                               |  | 12   | 
|                               |  |                                                                                                       |  |      | 
|PART II - OTHER INFORMATION    |  |                                                                                                       | 
|                               |  |                                                                                                       |  |      | 
|Item 1A.                       |  | Risk Factors                                                                                          |  | 13   | 
|                               |  |                                                                                                       |  |      | 
|Item 2.                        |  | Unregistered Sales of Equity Securities and
Use of Proceeds                                           |  | 13   | 
|                               |  |                                                                                                       |  |      | 
|Item 6.                        |  | Exhibits                                                                                              |  | 14   | 

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Table of Contents

PART I - FINANCIAL
INFORMATION

|                             | 
|---------------------------- | 
|Item 1. Financial Statements

RENAISSANCE LEARNING, INC. AND SUBSIDIARIES 
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)

|                                                                                                                            |  |                                                     |         |                    |   |         |  
|--------------------------------------------------------------------------------------------------------------------------- |  | --------------------------------------------------- | ------- | ------------------ | - | ------- | -
|                                                                                                                            |  | March 31,
 2009                                     |         | December 31,
 2008 |  
|                                                                                                                            |  | (In Thousands, Except Share and
 Per Share Amounts) |        
|ASSETS                                                                                                                      |  |                                                     |         |                    |   |         |  
|Current assets:                                                                                                             |  |                                                     |         |                    |   |         |  
|Cash and cash equivalents                                                                                                   |  | $                                                   | 13,116  |                    | $ | 9,509   |  
|Investment securities                                                                                                       |  |                                                     | 3,232   |                    |   | 4,894   |  
|Accounts receivable, less allowance of
 $1,065 and $1,090, respectively                                                     |  |                                                     | 6,637   |                    |   | 8,083   |  
|Inventories                                                                                                                 |  |                                                     | 4,900   |                    |   | 5,504   |  
|Prepaid expenses                                                                                                            |  |                                                     | 1,777   |                    |   | 1,999   |  
|Income taxes receivable                                                                                                     |  |                                                     | 984     |                    |   | 3,301   |  
|Deferred tax asset                                                                                                          |  |                                                     | 4,183   |                    |   | 4,183   |  
|Other current assets                                                                                                        |  |                                                     | 118     |                    |   | 144     |  
|Total current assets                                                                                                        |  |                                                     | 34,947  |                    |   | 37,617  |  
|Investment securities                                                                                                       |  |                                                     | 2,761   |                    |   | 3,383   |  
|Property, plant and equipment, net                                                                                          |  |                                                     | 7,499   |                    |   | 8,621   |  
|Deferred tax asset                                                                                                          |  |                                                     | 2,739   |                    |   | 2,742   |  
|Goodwill                                                                                                                    |  |                                                     | 2,740   |                    |   | 2,750   |  
|Other intangibles, net                                                                                                      |  |                                                     | 1,108   |                    |   | 1,178   |  
|Capitalized software, net                                                                                                   |  |                                                     | 131     |                    |   | 174     |  
|Other non-current assets                                                                                                    |  |                                                     | 859     |                    |   | 461     |  
|Total assets                                                                                                                |  | $                                                   | 52,784  |                    | $ | 56,926  |  
|                                                                                                                            |  |                                                     |         |                    |   |         |  
|LIABILITIES AND SHAREHOLDERS
EQUITY                                                                                        |  |                                                     |         |                    |   |         |  
|Current liabilities:                                                                                                        |  |                                                     |         |                    |   |         |  
|Accounts payable                                                                                                            |  | $                                                   | 3,152   |                    | $ | 1,712   |  
|Deferred revenue                                                                                                            |  |                                                     | 35,340  |                    |   | 43,975  |  
|Payroll and employee benefits                                                                                               |  |                                                     | 5,001   |                    |   | 3,981   |  
|Other current liabilities                                                                                                   |  |                                                     | 3,298   |                    |   | 3,284   |  
|Total current liabilities                                                                                                   |  |                                                     | 46,791  |                    |   | 52,952  |  
|Deferred revenue                                                                                                            |  |                                                     | 2,818   |                    |   | 2,950   |  
|Deferred compensation and other employee
 benefits                                                                          |  |                                                     | 1,258   |                    |   | 1,342   |  
|Income taxes payable                                                                                                        |  |                                                     | 4,868   |                    |   | 4,868   |  
|Other noncurrent liabilities                                                                                                |  |                                                     | 105     |                    |   | 133     |  
|Total liabilities                                                                                                           |  |                                                     | 55,840  |                    |   | 62,245  |  
|Shareholders equity:                                                                                                       |  |                                                     |         |                    |   |         |  
|Common stock, $.01 par; shares authorized:
 150,000,000; issued: 34,736,647 shares at March 31, 2009 and December 31,
 2008 |  |                                                     | 347     |                    |   | 347     |  
|Additional paid-in capital                                                                                                  |  |                                                     | 51,750  |                    |   | 51,735  |  
|Retained earnings                                                                                                           |  |                                                     | 40,362  |                    |   | 38,492  |  
|Treasury stock, at cost: 5,536,340 shares
 at March 31, 2009; 5,557,679 shares at December 31, 2008                         |  |                                                     | (95,148 | )                  |   | (95,568 | )
|Accumulated other comprehensive loss                                                                                        |  |                                                     | (367    | )                  |   | (325    | )
|Total shareholders equity                                                                                                  |  |                                                     | (3,056  | )                  |   | (5,319  | )
|Total liabilities and shareholders
equity                                                                                  |  | $                                                   | 52,784  |                    | $ | 56,926  |  

See accompanying notes to condensed
consolidated financial statements.

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Table of Contents

RENAISSANCE LEARNING, INC. AND SUBSIDIARIES 
CONDENSED CONSOLIDATED STATEMENTS OF INCOME 
(unaudited)

|                                  |  |                                         |        |      |   |        | 
|--------------------------------- |  | --------------------------------------- | ------ | ---- | - | ------ | 
|                                  |  | Three Months Ended
 March 31,           |       
|                                  |  | 2009                                    |        | 2008 |  
|                                  |  | (In Thousands, Exept Per Share Amounts) |       
|                                  |  |                                         |        |      |   |        | 
|Net Sales:                        |  |                                         |        |      |   |        | 
|Products                          |  | $                                       | 20,661 |      | $ | 22,205 | 
|Services                          |  |                                         | 8,209  |      |   | 7,181  | 
|Total net sales                   |  |                                         | 28,870 |      |   | 29,386 | 
|Cost of sales:                    |  |                                         |        |      |   |        | 
|Products                          |  |                                         | 2,996  |      |   | 4,035  | 
|Services                          |  |                                         | 2,906  |      |   | 3,762  | 
|Total cost of sales               |  |                                         | 5,902  |      |   | 7,797  | 
|Gross profit                      |  |                                         | 22,968 |      |   | 21,589 | 
|Operating expenses:               |  |                                         |        |      |   |        | 
|Product development               |  |                                         | 4,451  |      |   | 4,032  | 
|Selling and marketing             |  |                                         | 8,921  |      |   | 9,373  | 
|General and administrative        |  |                                         | 3,463  |      |   | 4,129  | 
|Total operating expenses          |  |                                         | 16,835 |      |   | 17,534 | 
|Operating income                  |  |                                         | 6,133  |      |   | 4,055  | 
|Other income, net                 |  |                                         | 148    |      |   | 168    | 
|Income before taxes               |  |                                         | 6,281  |      |   | 4,223  | 
|Income taxes                      |  |                                         | 2,374  |      |   | 1,605  | 
|Net income                        |  | $                                       | 3,907  |      | $ | 2,618  | 
|                                  |  |                                         |        |      |   |        | 
|Earnings per share:               |  |                                         |        |      |   |        | 
|Basic and diluted                 |  | $                                       | 0.13   |      | $ | 0.09   | 
|                                  |  |                                         |        |      |   |        | 
|Cash dividends declared per share |  | $                                       | 0.07   |      | $ | 0.07   | 

See accompanying notes to condensed
consolidated financial statements.

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Table of Contents

RENAISSANCE LEARNING, INC. AND SUBSIDIARIES 
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS 
(unaudited)

|                                                                                           |  |                                       |        |      |   |        |  
|------------------------------------------------------------------------------------------ |  | ------------------------------------- | ------ | ---- | - | ------ | -
|                                                                                           |  | For the Three Months Ended
 March 31, |       
|                                                                                           |  | 2009                                  |        | 2008 |  
|                                                                                           |  | (In Thousands)                        |       
|                                                                                           |  |                                       |        |      |   |        |  
|Reconciliation of net income to net cash
 provided by operating activities:                |  |                                       |        |      |   |        |  
|Net income                                                                                 |  | $                                     | 3,907  |      | $ | 2,618  |  
|Adjustments to arrive at cash provided by
 operating activities:                           |  |                                       |        |      |   |        |  
|Depreciation and amortization                                                              |  |                                       | 710    |      |   | 964    |  
|Amortization of investment
 discounts/premiums                                             |  |                                       | 15     |      |   | 29     |  
|Share-based compensation expense                                                           |  |                                       | 457    |      |   | 383    |  
|Deferred income taxes                                                                      |  |                                       | 3      |      |   | 9      |  
|Excess tax benefits from share based
 payment arrangements                                 |  |                                       | (6     | )    |   | (13    | )
|Gain on sale of property                                                                   |  |                                       | (109   | )    |   |       |  
|Change in assets and liabilities, excluding
 the effects of acquisitions and divestitures: |  |                                       |        |      |   |        |  
|Accounts receivable                                                                        |  |                                       | 1,446  |      |   | (687   | )
|Inventories                                                                                |  |                                       | 604    |      |   | 291    |  
|Prepaid expenses                                                                           |  |                                       | 222    |      |   | 251    |  
|Income taxes                                                                               |  |                                       | 2,323  |      |   | 943    |  
|Accounts payable and other liabilities                                                     |  |                                       | 2,446  |      |   | 1,517  |  
|Deferred revenue                                                                           |  |                                       | (8,767 | )    |   | (4,977 | )
|Other                                                                                      |  |                                       | (350   | )    |   | (333   | )
|Net cash provided by operating activities                                                  |  |                                       | 2,901  |      |   | 995    |  
|                                                                                           |  |                                       |        |      |   |        |  
|Cash flows from investing activities:                                                      |  |                                       |        |      |   |        |  
|Purchase of property, plant and equipment                                                  |  |                                       | (144   | )    |   | (345   | )
|Maturities/sales of investment securities                                                  |  |                                       | 2,135  |      |   | 2,000  |  
|Capitalized software development costs                                                     |  |                                       |       |      |   | (267   | )
|Net proceeds from sale of property                                                         |  |                                       | 774    |      |   |       |  
|Net cash provided by investing activities                                                  |  |                                       | 2,765  |      |   | 1,388  |  
|                                                                                           |  |                                       |        |      |   |        |  
|Cash flows from financing activities:                                                      |  |                                       |        |      |   |        |  
|Proceeds from exercise of stock options                                                    |  |                                       |       |      |   | 293    |  
|Excess tax benefits from share-based
 payment arrangements                                 |  |                                       | 6      |      |   | 13     |  
|Dividends paid                                                                             |  |                                       | (2,036 | )    |   | (2,030 | )
|Purchase of treasury stock                                                                 |  |                                       | (29    | )    |   | (21    | )
|Net cash used by financing activities                                                      |  |                                       | (2,059 | )    |   | (1,745 | )
|Net increase in cash and cash equivalents                                                  |  |                                       | 3,607  |      |   | 638    |  
|Cash and cash equivalents, beginning of
 period                                            |  |                                       | 9,509  |      |   | 7,337  |  
|Cash and cash equivalents, end of period                                                   |  | $                                     | 13,116 |      | $ | 7,975  |  

See accompanying notes to condensed
consolidated financial statements.

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Table of Contents

RENAISSANCE LEARNING, INC. AND SUBSIDIARIES 
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

1. Consolidation

The
condensed consolidated financial statements include the financial results of
Renaissance Learning, Inc. and our subsidiaries.

2. Basis of Presentation

The
condensed consolidated financial statements reflect all adjustments (consisting
only of normal recurring adjustments) which are, in our opinion, necessary for
a fair presentation of the results of the interim periods, and are presented on
an unaudited basis. These financial statements should be read in conjunction
with the financial information contained in our Annual Report on Form 10-K for
the year ended December 31, 2008 (2008 Annual Report), which is on file with
the U.S. Securities and Exchange Commission (the SEC). The results of
operations for the three-month periods ended March 31, 2009 and 2008 are not
necessarily indicative of the results to be expected for the full year.

3. Earnings Per Common Share

Basic
earnings per common share is computed by dividing net income by the weighted
average number of common shares and participating securities outstanding during
the period. Participating securities include unvested restricted shares and
restricted share units that have a nonforfeitable right to dividends or
dividend equivalents (whether paid or unpaid). Common shares and participating
securities issued or reacquired during the period are weighted for only the
portion of the period during which they were outstanding.

Diluted
earnings per common share has been computed based on the weighted average
number of common shares and other participating securities outstanding,
increased by the number of additional common shares that would have been
outstanding if the potentially dilutive stock option shares and
non-participating restricted shares and restricted share units had been
issued.

The
weighted average shares outstanding are as follows:

|                                                  |  |                              |            |      |  |            | 
|------------------------------------------------- |  | ---------------------------- | ---------- | ---- |  | ---------- | 
|                                                  |  | Three Months Ended March 31, |           
|                                                  |  | 2009                         |            | 2008 | 
|Basic
 weighted average shares outstanding        |  |                              | 29,100,186 |      |  | 29,004,205 | 
|Dilutive
 effect of non-participating securities: |  |                              |            |      |  |            | 
|Stock options                                     |  |                              |           |      |  | 372        | 
|Restricted shares and restricted share
 units     |  |                              |           |      |  | 3,624      | 
|Diluted
 weighted average shares outstanding      |  |                              | 29,100,186 |      |  | 29,008,201 | 

For
the three months ended March 31, 2009 and 2008, there were 723,311 and 782,201
shares, respectively, excluded from the calculation of diluted earnings per
share because their effect was antidilutive. These securities could be included
in the calculation of diluted earnings per share in the future.

4. Comprehensive Income

For
the quarters ended March 31, 2009 and 2008, comprehensive income was $3.9
million and $2.6 million, respectively. Our comprehensive income includes net
income and foreign currency translation adjustments.

5. Goodwill and Other Intangible Assets

In
accordance with Statement of Financial Accounting Standards No. 142, Goodwill
and Other Intangible Assets, goodwill is not amortized and we are required to
assess goodwill at least annually for impairment by applying a fair value-based
test. Other intangibles consist of customer relationships acquired in connection
with the purchase of AlphaSmart, Inc. (AlphaSmart). The customer
relationships intangible is amortized over its useful life of ten years, on the
declining balance method.

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Table of Contents

For
the three months ended March 31, 2009 and 2008, we recognized amortization
expense of $70,000 and $123,000, respectively. Other intangibles consisted of
the following:

|                        |  |                 |       |                           |   |       |  |      |       |                           |   |       |  |   |       |  |   |       | 
|----------------------- |  | --------------- | ----- | ------------------------- | - | ----- |  | ---- | ----- | ------------------------- | - | ----- |  | - | ----- |  | - | ----- | 
|                        |  | March
 31, 2009 |       | December
 31, 2008        |  
|                        |  | Cost            |       | Accumulated
 Amortization |   | Net   |  | Cost |       | Accumulated
 Amortization |   | Net   | 
|                        |  | (In
Thousands)  |      
|                        |  |                 |       |                           |   |       |  |      |       |                           |   |       |  |   |       |  |   |       | 
|Customer
 relationships |  | $               | 3,200 |                           | $ | 2,092 |  | $    | 1,108 |                           | $ | 3,200 |  | $ | 2,022 |  | $ | 1,178 | 

6. Recent Accounting Pronouncements

In
December 2007, the FASB issued SFAS No. 141R, Business
Combinations, which replaces SFAS No. 141. The statement retains the
purchase method of accounting for acquisitions, but requires a number of
changes, including changes in the way assets and liabilities are recognized in
purchase accounting. It also changes the recognition of assets acquired and
liabilities assumed arising from contingencies, requires the capitalization of
in-process research and development at fair value, and requires the expensing
of acquisition-related costs as incurred. SFAS No. 141R is effective for us on
January 1, 2009 and applies prospectively to business combinations completed on
or after that date. Adoption of SFAS No. 141R did not affect our consolidated
financial statements.

In
December 2007, the FASB issued SFAS No. 160 Noncontrolling
Interests in Consolidated Financial Statements, an amendment of ARB No. 51
(SFAS 160). SFAS 160 will change the accounting and reporting for minority
interests, which will be recharacterized as noncontrolling interests and
classified as a component of equity. This new consolidation method will
significantly change the accounting for transactions with minority interest
holders. SFAS 160 is effective for us on January 1, 2009. Adoption of SFAS 160
did not affect our consolidated financial statements.

In
April 2008, the FASB issued FASB Staff Position (FSP) 142-3, Determination of the Useful Life of Intangible
Assets. FSP 142-3 intends to
improve the consistency between the useful life of a recognized intangible
asset under SFAS 142, Goodwill and Other
Intangible Assetsand the period of expected cash flows used to
measure the fair value of the asset under SFAS 141 (revised 2007), Business Combinations (SFAS 141R) and
other accounting principles generally accepted in the United States. FSP 142-3
is effective for us on January 1, 2009 and applies prospectively to intangible
assets acquired on or after that date. Adoption of FSP 142-3 did not affect our
consolidated financial statements.

In
June 2008 the FASB issued FASB Staff Position FSP EITF 03-6-1 Determining Whether Instruments Granted in
Share-Based Payment Transactions Are Participating Securities. FSP
EITF 03-6-1 requires that unvested share-based payment awards that contain
nonforfeitable rights to dividends or dividend equivalents (whether paid or
unpaid) are participating securities and shall be included in the computation
of basic earnings per share. This FSP is effective for us on January 1, 2009
and also requires retroactive restatement of earnings per share for all prior
periods presented in the financial statements and footnotes. Adoption of FSP
EITF 03-6-1 did not have a material impact on our basic or diluted earnings per
share.

7. Share-Based Compensation

There
were no options to purchase our common stock granted during the three months
ended March 31, 2009 and March 31, 2008. The exercise prices for all options
are equal to the fair market value of our common stock on the date the options
were granted.

Restricted
stock awards, consisting of restricted shares and restricted share units, are
granted to certain employees and our non-employee directors. For employees,
restricted stock awards generally vest over a period of four years and for
non-employee directors, upon termination of the individuals tenure on our
board. Restricted stock awards to employees are expensed over the vesting
period, and those made to our non-employee directors are expensed when granted.
We granted restricted stock awards for 26,750 shares during the three months
ended March 31, 2009, and granted restricted stock awards for 14,713 shares
during the three months ended March 31, 2008. We value restricted stock awards
at the closing market price of our common stock on the date of grant.

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Table of Contents

A
summary of restricted stock award activity for the three months ended March 31,
2009 is as follows:

|                            |  |                                          |     |                                   |   |                            |  |   |       | 
|--------------------------- |  | ---------------------------------------- | --- | --------------------------------- | - | -------------------------- |  | - | ----- | 
|                            |  | Shares                                   |     | Weighted Average
 Value Per Share |   | Aggregate
 Intrinsic Value | 
|                            |  | (In
Thousands, Except Per Share Amounts) |    
|                           
|Balance at
 January 1, 2009 |  |                                          | 329 |                                   | $ | 13.57                      |  | $ | 2,960 | 
|Granted                     |  |                                          | 27  |                                   |   | 6.75                       |  |   |       | 
|Vested                      |  |                                          | (8  | )                                 |   | 7.96                       |  |   |       | 
|Forfeitures                 |  |                                          | (2  | )                                 |   | 12.06                      |  |   |       | 
|Balance at
 March 31, 2009  |  |                                          | 346 |                                   | $ | 13.17                      |  | $ | 3,109 | 

As
of March 31, 2009, the total unearned compensation related to share-based
compensation awards, net of estimated forfeitures, was $2.1 million, which will
be amortized as expense over the weighted average remaining period of 2.4
years. Total share-based compensation was $0.5 million for the three months
ended March 31, 2009.

8. Dividends

On
February 11, 2009 our Board of Directors declared a quarterly cash dividend of
$0.07 per share, payable March 9, 2009 to shareholders of record as of February
23, 2009.

9. Subsequent Event

On
April 29, 2009, our Board of Directors declared a quarterly cash dividend of
$0.07 per share, payable June 1, 2009 to shareholders of record as of May 15,
2009.

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Table of Contents

|                                                                                               | 
|---------------------------------------------------------------------------------------------- | 
|Item 2. Managements Discussion and Analysis of Financial Condition and Results
 of Operations

Results of Operations

Our
results of operations can be affected by many factors including the general
economic environment, state and federal government budgetary decisions and, the
length and complexity of the sales cycle for school districts. National trends, federal and state
legislation, Department of Education administrative policies and, the way the
foregoing align with our products and services can impact our business.

An
important component of our software product strategy is a transition to a
subscription-based software sales model. We believe that a business model based
on subscription-based software offers long-term advantages over traditional
perpetual licensing, including: (i) improved product utilization leading to
higher levels of customer satisfaction, (ii) product adoption by more schools
and, (iii) more lifetime revenue per customer.

We
believe the percentage of customers using the subscription-based Enterpriseversion of our reading and math
products is an important indicator of: (i) the progress of this strategic
growth initiative, (ii) the magnitude of the growth opportunities still
existing with regard to this strategy and (iii) the impact of the new seasonal
patterns on our business. As of the end of the first quarter 2009, about
one-third of our active reading product customers were using the Enterprise version. Worldwide, we
currently have approximately 55,000 active Accelerated
Reader customers, 18,000 activeAccelerated Math customers and 47,000 active STAR Reading and STAR Math customers.

We
have experienced a change in customer order patterns as the number of schools
using our subscription-based products increases. Compared to orders for
non-subscription-based offerings, customer orders of our subscription-based
offerings tend to more closely follow school budgeting patterns resulting in a
more seasonal order pattern weighted to the second and, even more so, third
calendar quarters. Also, after customers convert to our subscription-based Enterprise products, they no longer order
reading quizzes and math libraries since access to this content is included in
their subscription. Historically, our customers have ordered more of this
content in the first and fourth quarters. The combined effect is that a much
greater proportion of a years orders are expected in the second quarter and to
an even greater extent in the third quarter than we have experienced
historically. Transitioning our customer base to subscription-based software
can also adversely impact orders for add-on reading quizzes and math libraries
by customers who own our software under perpetual license agreements, as some
may delay purchases of reading quizzes and math libraries while they
contemplate converting to subscription-based versions of our products.

The
foregoing can significantly affect reported financial results. Since our Renaissance Place product and service
offerings are typically sold on a subscription basis with a term of 12 months,
a large portion of our revenue is initially deferred and recognized into income
over the subscription period. This timing difference between receipt of an
order and revenue recognition, on subscription based products and services, can
result in reported revenue being significantly lower or significantly higher
than the amount of orders received in any given period and can also affect
comparative results from one period to another.

Our
Renaissance Place products are
often sold at the school district level and district level sales are more
complex, have a longer sales cycle, and are typically for a larger dollar
amount than sales made to individual schools. Revenues from district sales are
therefore more uneven and more difficult to accurately predict than individual
school level sales. Consequently, our revenues and results of operations can be
significantly impacted by the timing of large district orders.

In
addition to the above factors, we believe that our first quarter orders were
negatively affected by customers who were hesitant to place orders during the
first quarter of 2009 due to the economic downturn and the impact on school
budgets as well as by uncertainty about how funds available under the American
Recovery and Reinvestment Act could help them and which programs would be
funded. The focus of the education funds provided by the act is on achieving
sustainable impacts to improve classrooms and advancing learning and, we
believe that our products align well with these objectives.

We
have implemented several cost savings initiatives including reducing laptop
selling costs, implementing a general hiring freeze, reducing product
development expenses related to some of our lower-performing product lines and,
other general non-payroll cost constraints. There was minimal impact from these
initiatives in the first quarter because the savings were offset by one-time
severance and other charges.

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The
following table sets forth certain consolidated income statement data as a
percentage of net sales, except that individual components of costs of sales
and gross profit are shown as a percentage of their corresponding component of
net sales:

|                           |  |                               |        |      |  |        |   |   |        |  |  |       |   |   |        |   |  |       |  
|-------------------------- |  | ----------------------------- | ------ | ---- |  | ------ | - | - | ------ |  |  | ----- | - | - | ------ | - |  | ----- | -
|                           |  | Three
 Months Ended March 31, |        |      |  |        |   |   |       
|                           |  | 2009                          |        | 2008 |  | Change |  
|                           |  | (Dollars in Thousands)        |       
|                           |  |                               |        |      |  |        |   |   |        |  |  |       |   |   |        |   |  |       |  
|Net Sales:                 |  |                               |        |      |  |        |   |   |        |  |  |       |   |   |        |   |  |       |  
|Products                   |  | $                             | 20,661 |      |  | 71.6   | % | $ | 22,205 |  |  | 75.6  | % | $ | (1,544 | ) |  | -7.0  | %
|Services                   |  |                               | 8,209  |      |  | 28.4   | % |   | 7,181  |  |  | 24.4  | % |   | 1,028  |   |  | 14.3  | %
|Total net sales            |  |                               | 28,870 |      |  | 100.0  | % |   | 29,386 |  |  | 100.0 | % |   | (516   | ) |  | -1.8  | %
|                           |  |                               |        |      |  |        |   |   |        |  |  |       |   |   |        |   |  |       |  
|Cost of sales:             |  |                               |        |      |  |        |   |   |        |  |  |       |   |   |        |   |  |       |  
|Products                   |  |                               | 2,996  |      |  | 14.5   | % |   | 4,035  |  |  | 18.2  | % |   | (1,039 | ) |  | -25.7 | %
|Services                   |  |                               | 2,906  |      |  | 35.4   | % |   | 3,762  |  |  | 52.4  | % |   | (856   | ) |  | -22.7 | %
|Total cost of sales        |  |                               | 5,902  |      |  | 20.4   | % |   | 7,797  |  |  | 26.5  | % |   | (1,895 | ) |  | -24.3 | %
|Gross profit:              |  |                               |        |      |  |        |   |   |        |  |  |       |   |   |        |   |  |       |  
|Products                   |  |                               | 17,665 |      |  | 85.5   | % |   | 18,170 |  |  | 81.8  | % |   | (505   | ) |  | -2.8  | %
|Services                   |  |                               | 5,303  |      |  | 64.6   | % |   | 3,419  |  |  | 47.6  | % |   | 1,884  |   |  | 55.1  | %
|Total gross profit         |  |                               | 22,968 |      |  | 79.6   | % |   | 21,589 |  |  | 73.5  | % |   | 1,379  |   |  | 6.4   | %
|                           |  |                               |        |      |  |        |   |   |        |  |  |       |   |   |        |   |  |       |  
|Operating expenses:        |  |                               |        |      |  |        |   |   |        |  |  |       |   |   |        |   |  |       |  
|Product development        |  |                               | 4,451  |      |  | 15.4   | % |   | 4,032  |  |  | 13.7  | % |   | 419    |   |  | 10.4  | %
|Selling and marketing      |  |                               | 8,921  |      |  | 30.9   | % |   | 9,373  |  |  | 31.9  | % |   | (452   | ) |  | -4.8  | %
|General and administrative |  |                               | 3,463  |      |  | 12.0   | % |   | 4,129  |  |  | 14.1  | % |   | (666   | ) |  | -16.1 | %
|Total operating expenses   |  |                               | 16,835 |      |  | 58.3   | % |   | 17,534 |  |  | 59.7  | % |   | (699   | ) |  | -4.0  | %
|                           |  |                               |        |      |  |        |   |   |        |  |  |       |   |   |        |   |  |       |  
|Operating income           |  |                               | 6,133  |      |  | 21.2   | % |   | 4,055  |  |  | 13.8  | % |   | 2,078  |   |  | 51.2  | %
|Other, net                 |  |                               | 148    |      |  | 0.6    | % |   | 168    |  |  | 0.6   | % |   | (20    | ) |  | -11.6 | %
|Income before taxes        |  |                               | 6,281  |      |  | 21.8   | % |   | 4,223  |  |  | 14.4  | % |   | 2,058  |   |  | 48.7  | %
|Income taxes               |  |                               | 2,374  |      |  | 8.2    | % |   | 1,605  |  |  | 5.5   | % |   | 769    |   |  | 48.0  | %
|Net income                 |  | $                             | 3,907  |      |  | 13.5   | % | $ | 2,618  |  |  | 8.9   | % | $ | 1,289  |   |  | 49.2  | %

Three Months Ended March 31, 2009 and 2008

Net
Sales. Our net sales decreased by $0.5 million, or
1.8%, to $28.9 million in the first quarter of 2009 from $29.4 million in the first
quarter of 2008. Customer orders for our products decreased by approximately
$4.1 million or 16%, in the first quarter of 2009 compared to the first quarter
of 2008. Deferred revenue decreased by $8.8 million in the first quarter of
2009 versus a $5.0 million decrease in the prior years first quarter.

Product
revenue decreased by $1.5 million, or 7.0%, to $20.7 million in the first
quarter of 2009 from $22.2 million in the first quarter of 2008. Product
revenue was down primarily due to decreases in orders this quarter, somewhat
offset by recognition of deferred revenue from orders received in prior
periods.

Service
revenue increased by $1.0 million, or 14.3%, to $8.2 million in the first
quarter of 2009 from $7.2 million in the first quarter of 2008. Nearly all
categories of service revenue were up except for National Conference revenues.
We held a National Conference in the first quarter of 2008 but did not hold one
in the first quarter of 2009. The most significant increases in service
revenues occurred in hosting and other technical services. Service revenue
increased primarily due to recognition of deferred revenue from orders received
in prior periods.

-8-

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Table of Contents

Cost
of Sales. The cost of sales of products decreased by $1.0
million, or 25.7%, to $3.0 million in the first quarter of 2009 from $4.0
million in the first quarter of 2008. As a percentage of product sales, the
cost of sales of products decreased to 14.5% in the first quarter of 2009 from
18.2% in the first quarter of 2008 primarily due to the product mix being
weighted more heavily to software and to reduced costs for some of our hardware
products.

The
cost of sales of services decreased by $0.9 million, or 22.7%, to $2.9 million
in the first quarter of 2009 from $3.8 million in the first quarter of 2008. As
a percentage of sales of services, the cost of sales of services decreased to
35.4% in the first quarter of 2009 from 52.4% in the first quarter of 2008. The
improvement was due to the growth in our more profitable technical services
areas, especially hosting, by better leveraging of our fixed costs and, because
last years first quarter costs were negatively impacted by our National
Conference.

Product
Development. Product development expenses increased by
$0.4 million, or 10.4%, to $4.4 million in the first quarter of 2009 from $4.0
million in the first quarter of 2008. The increase in product development
expenses is mainly due to capitalization of approximately $0.3 million of
software development costs in 2008 compared to no costs capitalized in the
current quarter. As a percentage of net sales, product development expenses
increased to 15.4% in the first quarter of 2009 from 13.7% in the first quarter
of 2008.

Selling
and Marketing. Selling and marketing expenses
decreased by $0.5 million, or 4.8%, to $8.9 million in the first quarter of
2009 from $9.4 million in the first quarter of 2008. Selling and marketing
expenses decreased due to lower travel costs and reduced advertising spending.
As a percentage of net sales, selling and marketing expenses decreased to 30.9%
in the first quarter of 2009 from 31.9% in the first quarter of 2008.

General
and Administrative. General and administrative
expenses decreased by $0.6 million, or 16.1%, to $3.5 million in the first
quarter of 2009 from $4.1 million in the first quarter of 2008. General and
administrative expenses decreased primarily due to $0.4 million incurred in the
prior year for cancellation fees related to termination of contracts for
certain training events. As a percentage of net sales, general and
administrative expenses decreased to 12.0% in the first quarter of 2009 from
14.1% in the first quarter of 2008.

Operating
Income. Operating income increased by $2.0 million, or
51.2%, to $6.1 million in the first quarter of 2009 from $4.1 million in the
first quarter of 2008. The increase was due to the gross profit margin
improvements and decreased operating expenses as explained in more detail
above. As a percentage of net sales, operating income increased to 21.2% in the
first quarter of 2009 from 13.8% in the first quarter of 2008.

Income
Tax.Income tax expense of $2.4 million was recorded
in the first quarter of 2009 at an effective income tax rate of 37.8% of
pre-tax income, compared to $1.6 million, or 38.0% of pre-tax income in the
first quarter of 2008.

Liquidity and Capital Resources

As
of March 31, 2009, our cash, cash equivalents and investment securities were
$19.1 million, up $1.3 million from $17.8 million at December 31, 2008. During
the first quarter 2009, we generated operating cash flow of $2.9 million offset
by $2.0 million used to pay dividends.

As
of March 31, 2009 we have a $15.0 million secured revolving line of credit with
a bank which is available until July 1, 2009. The line of credit bears interest
at either a floating rate or a fixed rate for a period of up to 90 days based
on LIBOR plus 1.5%. The rate is at our option and is determined at the time of
borrowing. We also have a $2.0 million unsecured revolving line of credit with
a bank available until April 30, 2010 which bears interest at the prime rate.
As of March 31, 2009, the lines of credit had not been used.

-9-

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On
April 17, 2002, our Board of Directors authorized the repurchase of up to
5,000,000 shares of our common stock; on February 9, 2005, our Board of
Directors authorized the repurchase of an additional 3,000,000 shares and; on
February 6, 2008, our Board of Directors authorized the repurchase of an
additional 1,000,000 shares under the stock repurchase program. No time limit
was placed on the duration of the repurchase program, nor is there any dollar
limit on the program. We repurchase shares on the open market as well as from
employees who elect to surrender shares at the time of vesting to pay their
payroll withholding taxes. Repurchased shares will become treasury shares and
may be used for stock-based employee benefit plans, equity compensation plans
and, for other general corporate purposes. From January 1, 2009 through March
31, 2009, we repurchased approximately 3,600 shares at a cost of $29,000. Since
the original authorization of the repurchase program in 2002, we have
repurchased approximately 7.8 million shares at a cost of $135.0 million.
Depending on our stock valuation, cash availability and other factors, we may
repurchase additional shares as a beneficial use of our cash to enhance
shareholder value.

We
paid quarterly cash dividends of $0.07 per share in each of the four quarters
of 2008 along with a special dividend of $0.75 per share in the fourth quarter
of 2008. In the first quarter of 2009 we paid a cash dividend of $0.07 per
share. On April 29, 2009, our Board of Directors declared a quarterly cash
dividend of $0.07 per share, payable June 1, 2009 to shareholders of record as
of May 15, 2009.

We
intend to continue to pay quarterly cash dividends, subject to capital
availability and a determination that cash dividends continue to be in the best
interests of the company and our shareholders. Our Board of Directors also
considers several additional factors when declaring dividends, including: the
companys financial statements as of the most recent practicable date, the
expected cash costs to deliver the products and services sold and recorded as
deferred revenue, the companys ability to provide the products and services
underlying the amounts recorded as deferred revenue, the likelihood of
recognizing amounts recorded as deferred revenue as net sales based on the
companys historical experience and most recent projections and the short time
period over which such recognition has historically occurred and is expected to
occur and, other information, opinions, reports and statements prepared and
presented by the companys officers and employees about the companys business,
operations and financial condition.

We
believe our strong cash position coupled with cash flow from operations will be
sufficient to meet both our short-term and long-term working capital
requirements.

Off-Balance Sheet Arrangements and Aggregate
Contractual Obligations

We
do not have any off-balance sheet transactions, arrangements or obligations
(including contingent obligations), that would have a material effect on our
financial results.

Operating
Leases. We enter into operating leases, primarily for
facilities that we occupy in order to carry out our business operations. We
utilize operating leases for some of our facilities to gain flexibility as
compared to purchasing facilities outright and to limit our exposure to many of
the risks of owning commercial property, particularly with regard to
international operations. These agreements are generally for terms of one to
five years. Some of the leases have early termination clauses, but they
generally cannot be terminated by either the lessor or us for reasons other
than breach of the lease agreement. We do not anticipate the early termination
of any significant lease agreement.

Purchase
Obligations. We enter into commitments with certain
suppliers to purchase our hardware products, such asNeo laptops, AccelScan
scanners and the 2Know! response
system. The majority of these
obligations will be satisfied within one year.

Tax
Audit Settlements and Deposits. Currently we do not
anticipate making any significant cash payments related to the settlement of
tax audits or deposits for unsettled audit issues. Estimation of the amounts
and timing of payments in periods after 2009 are highly uncertain and therefore
are not included in the table.

-10-

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Table of Contents

As
of March 31, 2009, our approximate contractual obligations for operating
leases, tax audit payments and purchase obligations (by period due) were as
follows:

|                            |  |       |       |                   |                        |            |  |            |       |                    |   |     |  |   |    |  | 
|--------------------------- |  | ----- | ----- | ----------------- | ---------------------- | ---------- |  | ---------- | ----- | ------------------ | - | --- |  | - | -- |  | 
|Contractual
 Obligations    |  |       |       |                   | Payments Due by Period |           
|(In
 Thousands)             |  | Total |       | Less than
 1 year |                        | 1-3
 years |  | 3-5
 years |       | More than
 5 years |  
|Operating lease obligations |  | $     | 3,858 |                   | $                      | 1,135      |  | $          | 1,701 |                    | $ | 934 |  | $ | 88 | 
|Purchase obligations        |  |       | 2,498 |                   |                        | 2,480      |  |            | 18    |                    |   |    |  |   |   | 
|Total                       |  | $     | 6,356 |                   | $                      | 3,615      |  | $          | 1,719 |                    | $ | 934 |  | $ | 88 | 

Critical Accounting Policies and Estimates

The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
judgments, estimates and assumptions that affect the amounts reported in the
financial statements and accompanying notes. Actual results could differ from
those estimates. There have been no significant changes to our critical
accounting policies that were disclosed in our 2008 Annual Report.

Forward-Looking Statements

In
accordance with the Private Securities Litigation Reform Act of 1995, we can
obtain a safe-harbor for forward-looking statements by identifying those
statements and by accompanying those statements with cautionary statements
which identify factors that could cause actual results to differ materially
from those in the forward-looking statements. Accordingly, the foregoing
Managements Discussion and Analysis of Financial Condition and Results of
Operations and the following Quantitative and Qualitative Disclosures About
Market Risk may contain certain forward-looking statements regarding strategic
growth initiatives, growth opportunities and managements expectations
regarding orders and financial results for 2009 and future periods. These
forward-looking statements are based on current expectations and current
assumptions which management believes are reasonable. However, these statements
involve risks and uncertainties that could cause actual results to differ
materially from any future results encompassed within the forward-looking
statements. Factors which may cause such a difference to occur include: (i) the
failure of Accelerated Reader Enterprise, Accelerated Math Enterprise and
laptop orders to achieve expected growth targets, (ii) a decline in reading
quiz and math library sales that exceeds expectations, (iii) risks associated
with our strategic growth initiative involving our transition to
subscription-based products, (iv) dependence on educational institutions and
government funding and (v) other risks affecting our business as described in
our filings with the Securities and Exchange Commission, including our 2008
Annual Report on Form 10-K and later filed quarterly reports on Form 10-Q and
current reports on Form 8-K, which factors are incorporated herein by
reference. We expressly disclaim a duty to provide updates to forward-looking
statements, whether as a result of new information, future events or other
occurrences.

|                                                                   | 
|------------------------------------------------------------------ | 
|Item 3. Quantitative and Qualitative Disclosures About Market Risk

Interest
Rate Risk. Our exposure to market interest rate risk
consists of: (i) the increase or decrease in the amount of interest income we
can earn on our investment portfolio and (ii) the decrease or increase in the
value of our investment security portfolio if market interest rates increase or
decrease, respectively. We anticipate that we will have sufficient liquidity to
hold our investments to maturity; therefore, we do not expect to recognize any
material losses or gains related to an increase or decrease in market interest
rates.

Market
Risk.Our exposure to market risk relates to the
quality of the holdings in our investment security portfolio. The fair market
value of our investments is subject to increases or decreases in value
resulting from the performance of the securities issuer, from upgrades or
downgrades in the creditworthiness of the securities issuer, upgrades or
downgrades in the creditworthiness of the insurer of the securities and, from
changes in general market conditions.

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Table of Contents

We
seek to manage our exposure to market risk by investing in accordance with our
corporate investment policy as established by our Board of Directors. The goals
of the policy are: (i) preservation of capital, (ii) provision of adequate
liquidity to meet projected cash requirements, (iii) minimization of risk of
principal loss through diversification and, (iv) maximization of yields in
relationship to the guidelines, risk, market conditions and tax considerations.

Our
investment policy permits investments in obligations of the U.S. Treasury
department and its agencies, money market funds and, high quality
investment-grade corporate and municipal interest-bearing obligations. The
policy requires diversification to prevent excess concentration of issuer risk
and requires the maintenance of minimum liquidity levels. The policy precludes
investment in equity securities except for the specific purpose of funding the
obligations related to our Supplemental Executive Retirement Plan. As of March
31, 2009, our investment securities had a market value of approximately $6.0
million and a carrying value of $6.0 million. Due to the type and duration of
our investments, we do not expect to realize any material gains or losses
related to market risk.

Foreign
Currency Exchange Rate Risk. The financial position
and results of operations of our foreign subsidiaries are measured using local
currency. Revenues and expenses of such subsidiaries have been translated into
U.S. dollars using average exchange rates prevailing during the period. Assets
and liabilities have been translated at the rates of exchange on the balance
sheet date. We use the historical exchange rates published by the OANDA
Corporation for these translations. Translation gains or losses are deferred as
a separate component of shareholders equity. Aggregate foreign currency
transaction gains and losses are included in determining net income. As such,
our operating results are affected by fluctuations in the value of the U.S.
dollar compared to the British pound, Canadian dollar and the Euro. At this time,
foreign exchange rate risk is not significant due to the relative size of our
foreign operations and revenues derived from sales in foreign currencies.

|                                | 
|------------------------------- | 
|Item 4. Controls and Procedures

We
maintain disclosure controls and procedures that are designed to ensure that
information required to be disclosed in our reports filed under the Securities
Exchange Act of 1934, as amended (the Exchange Act), is recorded, processed,
summarized and reported within the time periods specified in the rules and
forms of the SEC, and that such information is accumulated and communicated to
our management, including our Chief Executive Officer (CEO) and Chief
Financial Officer (CFO), as appropriate, to allow timely decisions regarding
required disclosures. In designing and evaluating our disclosure controls and
procedures, management recognized that any controls and procedures, no matter
how well designed and operated, can provide only reasonable assurance of
achieving the desired control objectives and management was necessarily
required to apply its judgment in evaluating the cost-benefit relationship of
possible controls and procedures.

As
of March 31, 2009, an evaluation was performed under the supervision and with
the participation of management, including our CEO and CFO, of the
effectiveness of the design and operation of our disclosure controls and
procedures. Based on that evaluation, management, including the CEO and CFO,
concluded that our disclosure controls and procedures are effective to ensure
that information required to be disclosed by us in reports that we file or
submit under the Exchange Act is recorded, processed, summarized and reported,
within the time periods specified in the rules and forms of the SEC.

There
has been no change in our internal control over financial reporting that has
occurred during the quarter ended March 31, 2009 that has materially affected,
or is reasonably likely to materially affect, our internal control over
financial reporting.

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Table of Contents

Part II - OTHER INFORMATION

|                      | 
|--------------------- | 
|Item 1A. Risk Factors

There
have been no material changes from risk factors previously disclosed in our
2008 Annual Report in response to Item 1A to Part I of Form 10-K.

|                                                                    | 
|------------------------------------------------------------------- | 
|Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

On
April 17, 2002, our Board of Directors authorized a repurchase program which
provides for the repurchase of up to 5,000,000 shares of our common stock. On
February 9, 2005, our Board of Directors authorized the repurchase of an
additional 3,000,000 shares under the stock repurchase program. On February 6,
2008 our Board of Directors authorized the repurchase of an additional
1,000,000 shares under the stock repurchase program.

No
time limit was placed on the duration of the repurchase program, nor is there
any dollar limit on the program. We repurchase shares on the open market as
well as from employees who elect to surrender shares at the time of vesting to
pay their payroll withholding taxes. Repurchased shares will become treasury
shares and may be used for equity compensation plans, stock-based employee
benefit plans and for other general corporate purposes.

The
following table shows information relating to the repurchase of shares of our
common stock during the three months ended March 31, 2009:

|              |  |                                    |       |                               |   |                                                                                      |  |                                                                                   |       |  |  |           | 
|------------- |  | ---------------------------------- | ----- | ----------------------------- | - | ------------------------------------------------------------------------------------ |  | --------------------------------------------------------------------------------- | ----- |  |  | --------- | 
|Period        |  | Total Number
 of Shares
 Purchased |       | Average Price
 Paid per Share |   | Total Number of
 Shares Purchased as
 Part of Publicly
 Announced Plans or
 Programs |  | Maximum Number of
 Shares that May Yet Be
 Purchased Under the Plans
 or Programs |      
|January 1-31  |  |                                    | 1,615 |                               | $ | 7.56                                                                                 |  |                                                                                   | 1,615 |  |  | 1,233,466 | 
|              |  |                                    |       |                               |   |                                                                                      |  |                                                                                   |       |  |  |           | 
|February 1-28 |  |                                    | 2,018 |                               |   | 8.35                                                                                 |  |                                                                                   | 2,018 |  |  | 1,231,448 | 
|              |  |                                    |       |                               |   |                                                                                      |  |                                                                                   |       |  |  |           | 
|March 1-31    |  |                                    |      |                               |   |                                                                                     |  |                                                                                   |      |  |  | 1,231,448 | 
|              |  |                                    |       |                               |   |                                                                                      |  |                                                                                   |       |  |  |           | 
|Total         |  |                                    | 3,633 |                               | $ | 8.00                                                                                 |  |                                                                                   | 3,633 |  |  |           | 

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|                 | 
|---------------- | 
|Item 6. Exhibits

Exhibits.

|            |  |                                                | 
|----------- |  | ---------------------------------------------- | 
|Exhibit No. |  | Description                                    | 
|            |  |                                               
|31.1        |  | Section 302
 certification by Terrance D. Paul
|            |  |                                               
|31.2        |  | Section 302
 certification by Mary T. Minch   
|            |  |                                               
|32.1        |  | Section 906
 certification by Terrance D. Paul
|            |  |                                               
|32.2        |  | Section 906
 certification by Mary T. Minch   

| | 
| | 

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SIGNATURES

Pursuant to
the requirements of the Securities Exchange Act of 1934, the Registrant has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.

| |             |  |                                         | 
| | ----------- |  | --------------------------------------- | 
| |             |  | RENAISSANCE
 LEARNING, INC.            
| |             |  | (Registrant)                           
| |             |  |                                         | 
| | May 7, 2009 |  | /s/ Terrance
 D. Paul                   | 
| | Date        |  | Terrance D.
 Paul                      
| |             |  | Chief
 Executive Officer and a Director
| |             |  | (Principal
 Executive Officer)         

| |             |  |                                                             | 
| | ----------- |  | ----------------------------------------------------------- | 
| | May 7, 2009 |  | /s/ Mary T.
 Minch                                          | 
| | Date        |  | Mary T.
 Minch                                             
| |             |  | Senior Vice
 President-Finance, Chief Financial Officer and
| |             |  | Secretary
 (Principal Financial and Accounting Officer)    

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Table of Contents

Index to Exhibits

|             |  |                                                | 
|------------ |  | ---------------------------------------------- | 
|Exhibit
 No. |  | Description                                    | 
|             |  |                                               
|31.1         |  | Section 302
 certification by Terrance D. Paul
|             |  |                                               
|31.2         |  | Section 302
 certification by Mary T. Minch   
|             |  |                                               
|32.1         |  | Section 906
 certification by Terrance D. Paul
|             |  |                                               
|32.2         |  | Section 906
 certification by Mary T. Minch   

| | 
| | 

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